8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  D.C. 20549 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2016

AXT, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-24085	94-3031310
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
4281 Technology Drive
Fremont,  California    94538
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:  (510) 438-4700

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On October 26, 2016, AXT, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2016.  A copy of the Company’s press release, announcing the results, is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information in Exhibit 99.1 hereto discussing the Company’s results of operations and financial condition for the quarter ended September 30, 2016, is being “furnished” in accordance with General Instruction B.2 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.  The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits

99.1     Press release dated October 26, 2016, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AXT, INC.
Date:  October 26, 2016	By:	/s/ Gary L. Fischer
		Gary L. Fischer
		Chief Financial Officer and Corporate Secretary

EXHIBIT INDEX

Eptem
Exhibit Number	Description
99.1	Press release dated October 26, 2016, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2016.

EX-99.1

Exhibit 99.1

AXT, Inc. Announces Third Quarter 2016 Results

October 26, 2016

Page 1 of 5

FOR IMMEDIATE RELEASE

Contacts:

Gary Fischer

Chief Financial Officer

(510) 438-4700

AXT, Inc. Announces Third Quarter 2016 Financial Results

FREMONT, Calif., October 26, 2016 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter, ended September 30, 2016.

	AXT, Inc.
	4281 Technology Drive
	Fremont, CA 94538
	Tel: 510.683.5900
	Fax: 510.353.0668
	www.axt.com.

Exhibit 99.1

AXT, Inc. Announces Third Quarter 2016 Results

October 26, 2016

Page 2 of 5

Third Quarter 2016 Results

Revenue for the third quarter of 2016 was $21.9 million, compared with $20.5 million in the second quarter of 2016.

Gross margin was 34.6 percent of revenue for the third quarter of 2016, compared with 29.4 percent of revenue in the second quarter of 2016.

Operating expenses were $4.9 million in the third quarter of 2016, compared with $5.1 million in the second quarter of 2016. 

Operating profit for the third quarter of 2016 was $2.7 million compared with operating profit of $0.9 million in the second quarter of 2016. 

Net interest and other income for the third quarter of 2016 was a loss of $0.3 million, compared with $0.0 million in the second quarter of 2016.

Net profit in the third quarter of 2016 was $2.2 million, or $0.07 per diluted share, compared with a net profit of $1.2 million or $0.03 per diluted share in the second quarter of 2016.

Management Qualitative Comments

“We are pleased to again show meaningful progress in our business, achieving revenue and profits that exceeded our guidance range. In addition, our gross margin was 34.6% as a result yield improvements, manufacturing efficiencies, and higher production volume. We also generated positive cash flow.  Cash, cash equivalents and investments increased by $2.4 million.  We continue to seek out interesting market opportunities where our substrates can provide value to our customers.”

Conference Call

The company will host a conference call to discuss these results today at 1:30 p.m. PT. The conference call can be accessed at (844) 892-6598 (passcode 96094142). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (855) 859-2056 (passcode 96094142) until October 31, 2016. Financial and statistical information to be discussed in the call will be available on the company's website immediately prior to commencement of the call. Additional investor information can be accessed at http://www.axt.com or by calling the company's Investor Relations Department at (510) 438-4700.

Exhibit 99.1

AXT, Inc. Announces Third Quarter 2016 Results

October 26, 2016

Page 3 of 5

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge) through its manufacturing facilities in Beijing, China.  In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California.  The company’s substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell applications. Its vertical gradient freeze (VGF) technique for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates. AXT has manufacturing facilities in China and invests in joint ventures in China producing raw materials. For more information, see AXT’s website at http://www.axt.com.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the market demand for our products, our market opportunity, and our expectations with respect to our business prospects. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company’s operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: overall conditions in the markets in which the company competes; global financial conditions and uncertainties; policies and regulations in China; market acceptance and demand for the company’s products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; our ability to control costs, our ability to utilize our manufacturing capacity; product yields and their impact on gross margins; and other factors as set forth in the company’s annual report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission.  Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

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FINANCIAL TABLES TO FOLLOW

Exhibit 99.1

AXT, Inc. Announces Third Quarter 2016 Results

October 26, 2016

Page 4 of 5

AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue	$	21,872	$	18,371	$	61,080	$	59,445
Cost of revenue		14,294		13,766		42,222		45,706
Gross profit		7,578		4,605		18,858		13,739
Operating expenses:
Selling, general, and administrative		3,313		3,659		10,106		12,685
Research and development		1,566		1,657		4,419		4,287
Restructuring charge		—		—		226		—
Total operating expenses		4,879		5,316		14,751		16,972
Income (loss) from operations		2,699		(711)		4,107		(3,233)
Interest income, net		105		102		303		307
Equity in (loss) earnings of unconsolidated joint ventures		(581)		167		(1,437)		777
Other income, net		164		496		682		1,755
Income (loss) before provision for income taxes		2,387		54		3,655		(394)
Provision for income taxes		176		7		713		334
Net income (loss)		2,211		47		2,942		(728)
Less: Net (income) loss attributable to noncontrolling interests		18		(5)		480		(257)
Net income (loss) attributable to AXT, Inc.	$	2,229	$	42	$	3,422	$	(985)
Net income (loss) attributable to AXT, Inc. per common share:
Basic	$	0.07	$	(0.00)	$	0.10	$	(0.03)
Diluted	$	0.07	$	(0.00)	$	0.10	$	(0.03)
Weighted average number of common shares outstanding:
Basic		32,110		31,988		32,043		32,262
Diluted		33,138		31,988		32,615		32,262
		- more -

Exhibit 99.1

AXT, Inc. Announces Third Quarter 2016 Results

October 26, 2016

Page 5 of 5

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

	September 30,		December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	29,661	$	24,875
Short-term investments		9,563		11,437
Accounts receivable, net		18,380		18,468
Inventories		38,731		38,012
Related party notes receivable – current		—		—
Prepaid expenses and other current assets		5,265		4,096
Total current assets		101,600		96,888
Long-term investments		8,124		7,691
Property, plant and equipment, net		29,385		31,422
Related party notes receivable – long-term		1,735		1,781
Other assets		12,084		14,114
Total assets	$	152,928	$	151,896
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,277	$	6,460
Accrued liabilities		5,011		6,381
Total current liabilities		12,288		12,841
Long-term portion of royalty payments		719		1,150
Other long-term liabilities		307		344
Total liabilities		13,314		14,335
Stockholders’ equity:
Preferred stock		3,532		3,532
Common stock		32		32
Additional paid-in-capital		195,863		194,646
Accumulated deficit		(67,199)		(70,621)
Accumulated other comprehensive income		2,529		4,382
Total AXT, Inc. stockholders’ equity		134,757		131,971
Noncontrolling interests		4,857		5,590
Total stockholders’ equity		139,614		137,561
Total liabilities and stockholders’ equity	$	152,928	$	151,896